Thank you for the comment. I specifically said in my article that I was using price returns. I got contacted by someone from PIMCO about not using Total Return data so I collected the total return data and sent it back:

Data I found on TOTAL RETURNS for each of the three time periods I looked at.

You are completely wrong! The offering was announced on August 11th Closing Price: $27.64 current Price $27.10 so stock is down only 1.95% from when the offering was announced.

From SEC filing for TCAP:

"We may offer shares of common stock at a discount to net asset value per share in certain circumstances. On May 7, 2014, our common stockholders voted to allow us to sell or otherwise issue common stock at a price below net asset value per share for a period of one year ending on the earlier of May 7, 2015 or the date of our 2015 Annual Meeting of Stockholders."

BDCs, REITs, and MLPs all have secondary offerings. If you dont understand the risks associated with those assets classes then you should not be investing in them, and I would suggest you stick to plain vanilla stocks like those that make of the Dow.

They priced the secondary at $26.85, and the price is currently at $27.10, so the price is already back above the offering price. TCAP is a business development company and when they need more funds to invest is companies they can either: Issue Debt, Preferred Stock, or issue new shares. That is just the way BDCs work.

Thank you for the comment. I created a chart that shows the market cap-to gdp ratio with 10 year treasury rates factored in. Surprising that we are still be 2007, and still significantly below 2000. But with rates set to rise next year that could be changing.

Very good article, SPLV is my 3rd largest holding, and the large allocation to Utilities has started to worry me with rates potentially rising, and alternative energy sources like solar taking revenue away from utilities. I consider SPLV a bond replacement fund, and I am reluctant to sell because even with the allocation to utilities, it is a diversified fund, which has more growth prospects than bond ETFs do.

In a article I wrote last year I found the best combination of ETFs to provide low volatility and downside protection was a 50/50 allocation to SPLV, and VQT. VQT dynamically allocates between Stocks, Volatility, and Cash. If you look at a chart of VQT and the SPY, you can see at times when the SPY took a large dive VQT profited because of its allocation to Volatility.

Thank you for the information. I know my analogy is not exact, the point I was making was that WYDE should increase when there is fear in the bond market of defaults, just like the VIX increases when there is "fear" in the stock market.

What is your opinion on how BKW would pay for the deal, because according to Morningstar BKW has $905 million in cash, which would mean BKW would have to come up with rough $7 billion. I would think after today's massive move in the stock they would issue BKW stock to THI shareholders to pay for the deal. They might issue some debt as well, however I believe this is less likely since $2.86 billion in debt.